PPD 170 - Quiz #4 Answers

PPD 170 - Quiz #4 Answers - PPH122/PPD 170 Spring 2008 Quiz...

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PPH122/PPD 170 Spring 2008 Quiz 4 Name______________________ Student ID__________________ 1) a) Describe the two components that contribute to the total price of health insurance. The total price of health insurance includes the premium and the load factor. The premium covers the expected benefits, or the expected costs of medical care and the load factor captures the costs of administering the insurance, including design, sales and claims management. b) Why is the load factor typically lower for insurance bought through large employer groups? Many of the activities associated with administering insurance have fixed costs that do not depend on the size of the group that is insured (e.g benefit design, negotiation with providers, sales). These costs are lower per insurer if the group is larger – economies of scale. 2) a) Non profit companies (choose one) do not make profits do not have tax advantages compared with for profit companies X do not have owners who can claim the profits none of the above
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This note was uploaded on 06/02/2008 for the course POLICY, PL 170/122 taught by Professor Mukamel during the Spring '08 term at UC Irvine.

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PPD 170 - Quiz #4 Answers - PPH122/PPD 170 Spring 2008 Quiz...

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